NU clarifies position on terrorism cover

Norwich Union has clarified its position on home contents cover in light of the increased threat of terrorist attacks from Al-Qaida and Osama Bin Laden.

Thousands of policy holders have received renewal notices from the insurer including an exclusion clause against acts of terrorism.

Norwich Union claims it has merely clarified its current exclusion rather than expanding its scope, and has added a new section excluding harm or damage resulting “directly or indirectly from or indirectly from or in connection with terrorism regardless of any other contributing cause or event.”

Simon Burgess, managing director of insurer Goodfellows, accepts the move as a prudent step by the insurer, saying: “You can&#39t expect insurance firms to cover absolutely everything because a real catastrophe would wipe them out.

“Borrowers shouldn&#39t expect to be covered for such things – with the caveat that additional cover can be taken out for commercial borrowers who think they may be at risk.” Insurers have traditionally included clauses on war risk, passing cover for damage from their books to the government.

Norwich Union&#39s David Ross told Mortgage Strategy: “Insurers are looking at war risk and assessing the extent of terrorist cover within that. Insurers will not pay for acts of terrorism specifically, where the act of terrorism covers nuclear, biological or radiological attacks, which would normally have been excluded from policies.”